Middle-class homeowners are putting kitchen renovations on hold for fear of tax hikes in the autumn budget
Middle-class homeowners across the UK are putting off their kitchen renovation plans as fears grow over potential tax rises in next October’s Budget.
The prospect of higher taxes, signed by shadow chancellor Rachel Reeves, has led to a significant drop in consumer confidence, according to kitchen retailers.
Jamie Everett, founder of bespoke kitchens Kitchens Kitchens, noted a sharp drop in orders after a strong start to the year. He said: “In September it’s like someone just turned off the tap. The budget is the biggest roadblock right now.”
Many customers are taking a wait-and-see approach, worried that the tax increase may affect their income. Kitchen retailers such as Thomas Matthew in Dorset report that some customers are clearly saying they will wait for the Budget before proceeding with orders.
Uncertainty has had a major impact on consumer confidence across the home improvement industry. According to GfK’s index of consumer confidence, there was a significant drop in sentiment, which dropped by seven points in September to 20, indicating that households feel less secure about their finances.
Retailers are also facing the aftershocks of supply chain disruptions and rising costs from recent years. Vince Gunn, CEO of Harvey Jones, noted that the Budget stance has further reduced consumer confidence, despite the positive economic outlook at the start of the year.
Nick Glynne, CEO of Buy It Direct Group, which sells major household items such as appliances and furniture, echoed these concerns, citing a 9% drop in website traffic following public discussions about potential tax increases. “We rely on surplus funds,” said Glynne, emphasizing the impact that financial uncertainty has on high-ticket purchases like kitchens.
As the sector awaits clarification of the Autumn Budget, kitchen retailers remain cautious, with many expecting that the tough market could continue for up to six months if significant tax increases are introduced. The potential strain on consumer spending could exacerbate challenges for businesses already on edge following years of economic turmoil.
